NEW DELHI: In sanctioning the China Communications Construction Company (CCCC), the US has launched a precision strike against the Beijing-led Belt and Road Initiative (BRI), adding another layer to the growing animosity between the worlds largest and second largest economy.
The CCCC is the spearhead of BRI — a trans-continental connectivity undertaking, meant to anchor China’s rise as an unrivalled great power.
The giant enterprise and its subsidiaries are known for taking up massive infrastructure projects, including port development, in highly strategic corners of the globe. But China’s state-owned behemoth, has also courted controversy, ranging from pushing vulnerable countries in the Global South into a debt trap on the behest of the Communist Party of China, to causing environment harm in fragile ecological zones.
The CCCC made headlines when its subsidiary, the China Harbour Engineering Company (CHEC), became the face of what feasibility studies had already warned was a financially unviable project developing the Hambantota port in Sri Lanka. The costly and unsustainable project in the Indian Ocean, rapidly pushed Sri Lanka into a debt trap. Unable to repay the loan, Sri Lanka ceded control of the port to China for 99 years, not far from strategic sea lanes, which are major pathways of international trade. The handover also included Chinese takeover of 15,000 acres of adjoining land.
In neighbouring Bangladesh, the company’s record was hardly unblemished. In an investigative report, the New York Times, citing government officials, reported that CHEC has been accused of attempting to bribe an official at the ministry of roads, stuffing $100,000 into a box of tea.
Elsewhere in Asia, the World Bank, in 2009, banned CCCC from bidding for its projects for eight years in the Philippines. “CCCC is one of (Belt and Road’s) biggest players, with 923 active projects in 157 countries,” political risk consultancy Eurasia Group said in a note on August 26.
“It is most notable for involvement in Sri Lanka’s Hambantota Port, Pakistan’s Gwadar Port, and Italy’s Trieste and Genoa ports,” it observed.
During a five-year period starting from 2013, the CCCC signed a total of $63 billion in new contracts in Belt and Road countries, Fitch Ratings estimated.
US Secretary of State Mike Pompeo described CCCC, in a statement, as one of Beijing’s weapons “to impose an expansionist agenda,” slamming it for the “destructive dredging” of South China Sea outposts, corruption, as well as debt-trap financing and environmental destruction.
A total of 24 Chinese state-owned enterprises, including the CCCC, have been added to the US Commerce Department’s banned Entity List.
Following the August 26 move, the US government hopes to “encourage institutions and governments around the world to assess risk and reconsider business deals with the sort of predatory Chinese state-owned enterprises that we’ve identified here”, a senior State Department official was quoted as saying.
By targeting the BRI, the Americans have added another pillar to what appears to be a doctrinal shift of shedding engagement and, instead, adopting a policy to change China from within. In a major policy speech at the Nixon centre in California on July 23, Pompeo had declared that 50 years of engagement which had proved fruitless, required a complete reversal of policy towards China.
“Maybe it’s time for a new grouping of like-minded nations, a new alliance of democracies (to emerge)… Securing our freedoms from the Chinese Communist Party is the mission of our time, and America is perfectly positioned to lead it because our founding principles give us that opportunity,” he observed.
Ahead of targeting the BRI via the CCCC, and with China in focus, Washington had bolstered its military deployments at key locations in the Indo-Pacific. On August 12, three state-of-the-art radar evading B-2 bombers, widely recognised as the most advanced in the world, arrived at the US Indian Ocean base of Diego Garcia.
Because of their ultra-long-range endurance, and freedom to choose any target of choice, as enemy radars cannot pick these planes and destroy them, the B-2 planes can carry out punishing bombing raids in more than one theatre from their current forward base of Diego Garcia.
The deployment of the B-2 trio should not be seen in isolation. These planes were joining six B-52 Stratofortress bombers which had been dispatched six months ago, and continue to remain, in the archipelago.
In tune with the landing of the B-2 planes, the formidable US aircraft carrier, USS Ronald Reagan, had steamed into the South China Sea on August 14.
When these deployments, carrying enormous firepower are taken together, the bold and multiple messaging to China becomes sharply etched. In the South China Sea, the US was announcing that any Chinese attack and takeover of the strategic Pratas or Dongsha Islands of Taiwan, was a red line.
In Ladakh, the B-2 bombers can be used to destroy the 4,000-km range DF-26 ballistic missiles, which can mount either nuclear or conventional warheads. There have been reports that DF-26 systems have appeared in Korla, in Xinjiang region not far from the Ladakh theatre.
So far, it was anticipated that the DF-26 missiles were geared to strike US aircraft carriers in the West Pacific or the island of Guam — a key American military base in the West Pacific.
The reinforcement of Diego Garcia with strategic bombers, is also expected to send a signal to China, not to think about striking Guam.
So far, the Chinese are showing no intention of relenting to US pressure that is being mounted from multiple fronts. But simultaneously the voice of regional neighbours is also growing louder, seeking a fundamental shift in policy from Beijing.
On August 26 the People’s Liberation Army (PLA) “fired four medium-range missiles into [an] area between Hainan and the Paracel Islands”, in the South China Sea, a US military official disclosed a day later. The Chinese launched the DF- 21D ballistic missiles, designed to sink US aircraft carriers, as well as the DF-26B, tailor made for Guam.
But the missile firings, triggered a volley of protests from regional countries, seemingly emboldened by Washington’s show of strength. “China’s repeated military exercises in (the Paracel Islands) violate Vietnam’s sovereignty, complicating negotiations for a Code of Conduct of Parties in the South China Sea between China and ASEAN members,” Vietnamese Ministry of Foreign Affairs spokeswoman Le Thi Thu Hang said.
In Taiwan, President Tsai Ing-wen called on Beijing to restrain itself. “After Hong Kong, Taiwan stands increasingly on the front lines of freedom and democracy. We certainly hope that like-minded countries will continue to work together to ensure Taiwan’s security,” she said.
Tsai cited three components of her policy to ride the storm that was building up close to its shores.
“The first is our commitment to ensuring that we continue to take a pragmatic and consistent approach to our cross-strait policy,” she said.
“Another issue of importance is to strengthen our defence capabilities… The third component is to strengthen our linkages with like-minded countries.”
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